It's official: Toshiba surrenders to Blu-ray

Toshiba has officially abandoned its HD DVD technology, surrendering to Sony's Blu-ray in the entertainment industry's biggest format war since VHS beat Betamax in the 1980s.

The news follows yesterday's rise in the value of Toshiba shares as investors voiced their approval of the company's alleged decision to abandon the HD DVD optical disc format.

Toshiba will reduce shipments of players and recorders, aiming to close the business by March, the Tokyo-based company said in a statement today. The company will continue offering technical support to customers.

Sony's victory may stoke sales of high-definition discs, which offer clearer pictures than traditional DVDs, after shoppers held back purchases because of uncertainty over which technology would prevail. US retailers plan to stop selling HD DVDs after Warner Brothers Entertainment, the largest DVD publisher, said last month it would release its films only on Blu-ray.

"With a single format, consumers may be more willing to buy high-definition DVD players, helping the market grow," Akio Mizutani, a Tokyo-based researcher at Mizuho Corporate Bank Ltd, told said Bloomberg before the announcement. "Demand for high- definition products including televisions and cameras, is picking up, but will take time to reach its peak."

The company said it plans to end "volume production" of HD DVD disk drives for personal computers and games.

Toshiba, which made the decision after the pullout by Warner Bros., is calculating the costs for ending the operations, President Atsutoshi Nishida said at a briefing in Tokyo.